The Income-Tax (I-T) department can send a notice for various reasons, including transactions undertaken in online and offline modes. Here’s the lowdown on five transactions that will likely put you under the scanner of the I-T department.
Depositing cash in bank account: As per the guidelines of the Central Board of Direct Taxes (CBDT), in case an individual deposits an amount of Rs 10 lakh or more in cash in a financial year, such a transaction is reported to the Income-Tax (I-T) department.
This money is likely to have been deposited in one or more accounts of the same account holder. Considering an individual is depositing excess money over the prescribed threshold, the I-T department may ask them about the source of the money.
Depositing cash in fixed deposit: Considering a bank can inquire about cash deposits of Rs 10 lakh in a financial year in a bank account, it applies a similar norm for transactions in fixed deposits (FDs).
In case an individual deposits more than Rs 10 lakh in FDs in a financial year, the I-T department is likely to question them about the source of the money.
Purchasing shares, mutual funds, debentures, or bonds: Several individuals find investing in shares, mutual funds, debentures, or bonds a suitable option. Such investments may also foster the habit of saving money in an investor.
However, in case an individual uses a large sum of cash to buy shares, mutual funds, debentures, or bonds, it also raises the eyebrows of the I-T department.
In case an individual does a transaction of Rs 10 lakh or more in any of such investment options, its information reaches the I-T department, which is likely to ask you about the source of money.
Payment of credit card bill: Credit card usage is common these days, and many times, the users pile up bills, which may run into lakhs.
However, in case an individual’s monthly credit card bill exceeds Rs 1 lakh and they wish to pay it in cash, the I-T department is likely to ask you about the source of your money.
Similarly, in case an individual makes a payment of Rs 10 lakh or more in a financial year through online or offline modes, the I-T department may question them ass to where they got the money from.
Real estate transactions: Real estate prices in cities and tier-II cities are significantly high, and large amounts of transactions are a common practice.
However, in case an individual is making a cash transaction of Rs 30 lakh or more while purchasing a property, the I-T department will take notice of such a transaction for sure.
The property registrar will inform the I-T Department, which is likely to question you about the source of the money.
Rajiv is an independent editorial consultant for the last decade. Prior to this, he worked as a full-time journalist associated with various prominent print media houses. In his spare time, he loves to paint on canvas.
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